WASHINGTON (dpa-AFX) - After coming under pressure early in the session, stocks staged a recovery attempt in mid-day trading on Tuesday but moved back to the downside as the day progressed.
The major averages all finished the day in negative territory, with the tech-heavy Nasdaq showing a notable decline.
The Nasdaq tumbled 302.47 points or 1.2 percent to 25,818.69, the S&P 500 fell 33.58 points or 0.5 percent to 7,503.85 and the Dow dipped 130.76 points or 0.3 percent to 52,925.15.
The slump by the Nasdaq came amid a sharp pullback by semiconductor stocks, with the Philadelphia Semiconductor Index plummeting by 4.7 percent.
Semiconductor stocks were under pressure following a nearly 7 percent plunge by shares of South Korean memory chipmaker Samsung Electronics.
Samsung reported a 19-fold spike in second quarter profits, but the company's stock tumbled amid concerns about spending and demand.
'Although Samsung's results were stellar, investors are getting nervous about the scale of money ploughing into AI and whether it's a bubble waiting to burst,' said Dan Coatsworth, head of markets at AJ Bell.
A report from Reuters indicating Chinese startup DeepSeek is developing its own AI chip also weighed on semiconductor stocks.
Networking stocks also showed a substantial move to the downside, dragging the NYSE Arca Networking Index down by 3.7 percent.
Gold, airline and computer hardware stocks also saw considerable weakness, while energy, pharmaceutical and healthcare stocks turned in strong performances.
Energy stocks benefited from a sharp increase by the price of crude oil, although the spike in prices weighed on other sectors.
U.S. crude oil futures have surged by more than 5 percent in response to reports of projectile attacks against several vessels travelling through the Strait of Hormuz.
In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Tuesday. Japan's Nikkei 225 Index tumbled by 2.1 percent, while China's Shanghai Composite Index slumped by 1.3 percent.
Most European stocks also moved to the downside on the day. The German DAX Index slumped by 1.4 percent and the French CAC 40 Index fell by 0.5 percent, although the U.K.'s FTSE 100 Index bucked the downtrend and inched up by 0.1 percent.
In the bond market, treasuries came under considerable pressure over the course of the session. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, jumped 5.0 basis points to 4.529 percent.
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